Posted on June 15, 2009 at 6:08 pm

Around 100 years ago, the notion of social Darwinism was wildly popular amongst the well-to-do. Since then, it has been largely derided as unacceptable, cruel, and just plain incorrect. Apparently it’s reared its ugly head again, this time in Michele’s post and a Republican Party seemingly dedicated to driving itself into the ground.

Michele says that it bothers her that “the recession, and its effects, are regarded as ‘unfortunate’”. Already irked at her statement, I was even more flabbergasted by her reasoning. She claims that regarding the recession as “unfortunate” implies that “we are entitled to having fortunate things happen to us” — when, in reality, that is not the case at all. In my experience, at least, the recession is regarded as unfortunate not because of a sense of ‘entitlement’ but rather because I — and others — recognize that it is sad when people lose their job, lose their home, and have to struggle to get by. For the people who are actually experiencing the “joblosses and other effects on the economy,” as Michele puts it, these things aren’t merely “not the most pleasant occurrences” — they are devastating.

My problem with Michele’s notion that we should simply let businesses fail and the economy continue its downward spiral — it’ll come back eventually, right? — is that she doesn’t consider the fact that actual human beings will have to suffer through this. Perhaps this is not something she considered because the effects of the recession haven’t touched her or her family, but her proposal of “economic Darwinism” (the difference between which and social Darwinism I still fail to grasp) is morally unacceptable.

During the first months of the Great Depression, as banks were failing left and right, unemployment was skyrocketing, and the stock market continued its downward spiral, even the strict free-market Republican, President Hoover, recognized that simply sitting around and waiting out the economic crisis was simply not an option. Unfortunately, some of the programs that he implemented were simply too little, too late.

Michele provides the following analogy:

Let’s say Little Johnny consistently fails his math quizzes, no matter how much he studies; he simply is not good at math. We could get him an expensive, highly-educated math tutor; however, even with extraordinary help, it is more than likely that he will barely pull C’s and never become a Nobel Prize-winning mathematician. Sure, his low math SAT scores might drag down his district’s averages, but the fact of the matter is, math just isn’t his thing, and attempting to force him to be a gifted math student is counterproductive. This – expensive help for otherwise failing entities – is exactly what our government is doing right now. People, much like businesses, should do what they are good at; if they aren’t good at what they do, they shouldn’t be doing it.

The problem with this analogy is that “Little Johnny” is an individual and his failing out of math would have no effect on the livelihoods of other human beings. By contrast, the corporations being bailed out today employ tens- or hundreds- of thousands — if not millions — of Americans. By simply letting those corporations fail, those millions of Americans will wake up one day soon and have no job and, likely, no pension either. Interestingly — but not surprisingly — the way filing for bankruptcy protection works is this: the first people to have their money paid back are other corporations, then wealthy investors, then a bunch of other people, then there are the lower-level employees, and then (last) consumers. Translation? Let those companies go bankrupt, and ordinary Americans will get screwed while the wealthiest walk away with even more money than they had before.

I think it’s sad that so many people — such as Michele — seem to prioritize economic efficiency over human decency. They apparently do not realize that if they had their wish — if the government simply sad idly by while corporations failed left and right and the millions and millions of unemployed Americans had to wait around for months, if not years, for new employment to magically be created while their savings dry up — that an incredible amount of suffering would ensue. The wealthy would continue to do just fine, as they always do during times of crisis, while the rest of us have to scrounge up what little money we have to, say, pay our way through college or feed ourselves.

As Michele says, “we pride ourselves on living in a meritocracy” yet as states struggle to balance their budgets (ironically, compelled by state Constitutional amendments therein foisted by Republicans), poor students are amongst the first to suffer: according to the New York Times, New Hampshire is cutting its loan-forgiveness programs for college students. But, by all means, let’s continue to let the economy spiral so that the rich can continue to live their comfortable lifestyle while the rest of us can’t even afford to get a college degree. So much for pulling ourselves up by our bootstraps and “meritocracy”. Those who call for “economic sense” — those who think it is acceptable to let the most in-need amongst us sink into the rising economic muck so that they can keep their “hard”-”earned” money — seem to have lost their moral compass.

Most distressing about Michele’s post is that she even recognizes the troubles her economic theory will pose — she realizes that “jobs would be lost…many more than right now” — but she just does not care. She proudly titles this cold-hearted economic theory “economic Darwinism”. She says that suffering is great for creativity — so it can’t be all that bad, right?

Of those who are about to lose their jobs, she says, “let them eat cake”.

“I think it’s sad that so many people — such as Michele — seem to prioritize economic efficiency over human decency.”

Noah, I find it sad that so many people – such as yourself – seem to forget that economic efficiency helps everyone. The economy is, at its core, people exchanging goods and services. When the goods or services produced by one party are not desired by others, it is unpleasant but however, better and more efficient for everyone. What I argue – and you conveniently ignore – is that a free market, in which businesses are free to succeed and fail – helps everyone in the long run more and leads to higher living standards. What the government is doing now is just prolonging the inevitable and is hurting the economy in the long run. If we were to allow the economy to restructure, the economy would be more efficient and people would be helped more in the years to come, as they would have economically viable businesses to work for. What the government is doing right now is punishing the successful (the American taxpayer and anyone who participates in the economy) in favor of the unsuccessful (the banks, auto industry, etc). This drags everyone down, and leads to a less free economy.

The Declaration of Independence acknowledges the right to the “pursuit” of happiness. Please note that it only deals with the “pursuit” of happiness, and says nothing of a guarantee of it. Also, it is in the Declaration, not the Constitution – therefore, one could argue that Americans aren’t even privileged to that pursuit; I bring up this point, however, for arguments’ sake and do not subscribe to it (thanks to Conor, by the way, on the fact that it is in the Declaration). Likewise with employment and an enjoyable life – the only thing we are entitled to is to pursue those things; we are not entitled to them. Furthermore, “guaranteed” employment, as you seem to be in strong favor of, is impossible. The only way to get remotely close to it is through complete government control of the economy, which leads to gross inefficiency and reduced living standards for everyone. Mao’s China circa the 1950s and the Soviet Union are examples of this misguided government economic intervention. On the same note, you bring up the Great Depression and the New Deal. FDR’s plan for economic recovery was implemented in the early 1930s, but the economy didn’t recover until the 40s; the reasons for recovery were entirely unrelated to the New Deal. For more analysis on why the New Deal didn’t revitalize the economy, please see the work of Burton W. Folsom Jr.

On the whole human decency note, it is, I agree, awful that people who work for failing businesses are facing job losses. It is just terrible that people are being punished for having inept employers. However, the very same people whose fate you so invest in are not entitled to employment. However, they are entitled, through their own hard work and strong will, to craft a better life. If they are dissatisfied with their current economic situation, they are free to pursue another track which may be more economically viable. Furthermore, a fundamental theme underlying your argument deeply disturbs me. For while you proclaim to have the wellbeing of the people as your foremost interest, your ideology actually suggests a view that people are incapable of running their own lives and a general lack of faith in humanity. If you were truly confident in the American people, and people in general for that matter, you would not be so disturbed by the economy’s current restructuring. Instead, you seem to think that the only way for people to lead a decent life is through government intervention, and that sounds like socialism to me. It is important for us to realize that the economy, at its core, is just people. Businesses are comprised of people. The current intervention suggests a belief that people are not capable of running that they themselves created – the economy. I, on the other hand, am confident in people. When people are faced with hardship, their strength becomes apparent, and the ability of every single human being to improve their life through their own ingenuity and innovation must not be impeded. This is what I was arguing, that economic freedom helps everyone in the long run more than misguided government forays ever will.

Noah, I sympathize with your intentions. I really do. However, knee-jerk emotional reactions that lead to well-intentioned but harmful outcomes hurt people more than economic freedom ever will. We just have to give it time.

Michele, I agree with you on many points, and Noah with you on a few as well.
However, I disagree with each of you on a few things.
1) That the free-market economy is to blame for this recession
2) That the free-market hurts people and leaves people behind.

Without getting to long, I feel that this recession was caused by legislative mistakes,the bundling of mortgages and in a very large part, by the American people. Congress made it possible for someone with 40,000 to afford a near million-dollar home. That’s not the market, it’s a warped “housing” policy.

Second, it is thanks to the free market, not government control, that America is as prosperous as we are…it is by far the best system in the world for providing opportunity, general welfare, charity, medical care and equality of opportunity. If it’s not – show me somewhere else that works better.

Conor, I believe you have misunderstood what I have written. I intended to argue that the free market helps people more than the government ever can, and that it is more despite, not because of, the government that America is so economically prosperous. In my original draft of the comment (which was lost due to a technical error), I noted how some of the causes of the current recession can be tied to products, like securities bundles and low-requirements mortgages that ignore basic economic principles: the exchange of property rights and the concept that if one doesn’t have enough money for something, they should not buy it.

The US Constitution, with rare exception (ex. the 14 and 15th amendments) has only to do with negative rights — things we are protected from, rather than what we are entitled to. I recognize that, as well as the distinction between the Constitution and Declaration of Independence. What you fail to recognize, however, is the fact that there is a profound distinction to be made between the rights accorded to us by our government and the rights and entitlements accorded to us by our God, our humanity — our natural rights, as they are known.

Amongst these natural rights, long recognized by philosophers ranging from Locke to Hobbes to Mill, are a right to life — that is, survival — a right to shelter, food, drink. These rights are not established in our Constitution because our founding fathers chose not to establish a government with a responsibility to provide those entitlements. But the UN Declaration of Human Rights, in fact, does outline these rights — so it is interesting that you cite the Bill of Rights as a source of what we are entitled to rather than what our rights are, since you so confound those two concepts.

Furthermore, my concern was not the issue of a “right” to employment — something I never actually asserted. Rather, my concern was that you — like many of those who are so strongly in favor of the laissez-faire — expressed no true concern about the fact that an implementation of your proposed policy might result in the absolute destitution of many millions of people. While, in theory, the “rising tide” might “lift all boats”, the reality is that many of those boats have holes in them. While you focus on increasing the prosperity of the already-wealthy, we must all be concerned with those who are not so lucky (for indeed, that is essentially what becoming wealthy in this country these days is reflective of: luck, not brains.).

One day, after thousands of Americans have starved to death, after millions have lost their homes and have been brought to destitution, our economy may well grow again and our GDP may increase as well. But there will be one constant throughout: the wealthy will remain wealthy. Our middle class will shrink, and our working class will be thrust into poverty. Yet, apparently, the only concern of the Republican Party seems to be how well the well-to-do are doing.

This is a moral issue, not just an economic one, not just a problem of numbers and figures. At what point do we accept that our national growth is worth the suffering it causes? I had always thought that the GOP was so strongly in favor of individual rights, but this economic crisis has shown me that they are in favor of individual rights only so long as those rights are those of the rich — in this bizarre alternate universe in which the laissez-faire makes sense, the poor, somehow, can better afford to suffer for the benefit of the rich, rather than the other way around.

The issue here, as I have said before, is this: an economy must do not only well, but good.

Michele — something I’ve learned from repeated frustrations with lost comments, emails, etc. due to technical errors is to always press ctrl+a (to highlight the entire comment/what have you) and then ctrl+c (to copy it, in case it fails).

Noah, I believe that once again you have confused what I am saying. I find it curious how you seem to be under the impression that my views only involve the rich getting richer, which is hardly the case. The bank and auto CEOS – rich people who got richer because of the economic crisis – wouldn’t have received a dime extra had the government not bailed the companies out. Let’s say those banks had failed; then there would be a gap in the US financial system. That gap left by the crash of such a large financial institution would have spurred the opening of new local banks to fill the void, many of which probably would have been started by middle-class entrepreneurs – or at least would have employed middle-class workers. Think of the effects: construction costs, design costs, employees, etc. It would have helped many sectors of the economy.

On the human decency note again, I find it interesting how you have once again ignored my argument that EVERYONE is helped by the free market, and that the ENTIRE economy would have been better off without the bloated, unnecessary stimulus and bailout packages. As I outlined in another comment, a much better use of that money would have been to cut taxes and pour money into small business loans and education grants – something that would have helped all Americans and complemented the economy. I believe in empowering people to change their own economic situations. I truly do want people to have better lives – and that’s why I believe in working with the free market, as opposed to against it. Believe me, I would love for this world to be without poverty. Actually, the best way to bring people out of poverty is through the free market (but more on my favorite topic, microfinance, in a later post). It might be more fun and easier to argue against the system, but it’s a whole lot more productive to manipulate it from within. Or, to quote the old adage: give a man a fish, he eat for a day. Teach a man to fish, he can eat for a lifetime. I’m all about teaching people to fish – not throwing fish at them.

By the way: please stop throwing me in with the GOP. While I may have supported a few of their politicians in recent times, I’m still a registered Democrat (working on changing that one) and, not to sound like the inverse of Arlan Spector, have no plans of officially joining the Republican Party’s ranks any time soon.

First of all, I reject the notion that the free market helps all people, regardless of status and as such I do not proceed from that point. Repeatedly asserting that point, or insinuating that I’m either incapable of understanding the glories of the free market or am simply too ignorant to understand its wonders, will not make it more true.

Rather, reality has shown us that the deregulation of the market and elimination of the welfare state has led to less (not more, as we were promised) social mobility; it led to falling buying power, which couldn’t even keep up with inflation (while CEO salaries spun out of control — it required Congress to step in and prop up the minimum wage); it has led to more homelessness; and, yes, even a higher child mortality rate.

Meanwhile — as I addressed directly in my article — the economy might recover eventually, but what I’m concerned about right now is the actual suffering of American citizens. Allowing every firm to fail would simply produce a huge amount of immediate suffering which would not be counteracted by whatever gains were made later on.

That is not to say that I find the behavior of the CEOs acceptable at all. The Democratic Party should have used this opportunity to impose a sliding pay cap, so that, for example, a CEO could not make more then 200 times his lowest-paid worker (or the average salary of his workers — this would be something for Congress to discuss); the Democrats should have imposed limits on the corporations they bailed out could spend the money on — foreseeing the already-demonstrated greed of the corporate executives.

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